Canada's Pristine Power keen to tackle bioenergy

VANCOUVER (Reuters) - Pristine Power Inc, a small Canadian green energy developer, sees its biggest growth opportunity in bioenergy in the timber-rich province of British Columbia, its chief executive said.

Despite being battered in the past over plans to generate electricity from waste wood, Pristine believes it has learned from its mistakes and now has the knowledge, technology and fuel-supply arrangements it needs to thrive.

“The biggest opportunity in terms of scale of the opportunity and confidence in terms of what we’ve got and what we’re doing, is on bioenergy,” CEO Jeffry Myers said.

“It is big for us (and) there is not a lot of competition,” Myers told Reuters in an interview late on Monday.

Pristine, a seven-year-old Calgary, Alberta-based company, already operates a waste heat facility and a natural gas power plant, and is also developing wind energy assets in Ontario.

It is one of the bigger green start-ups in Canada with a market value of about C$80 million ($75 million).

Its stock has surged nearly 50 percent in the past three months, ahead of the closing of the company’s debt financing and permits for its C$337 million York Energy Center in Ontario, a 400 megawatt natural gas-fired plant north of Toronto, aimed at supply power at peak demand periods.

Pristine is one of 14 groups with project applications in British Columbia’s call for power supplied from biomass. BC Hydro, the provincial power utility is expected to name preferred bidders in mid-January 2011.

The company won a 65 MW biomass contract in northern British Columbia in 2003, but not long after 12 nearby lumber mills shut down due to a price slump, cutting off Pristine’s fuel supply and halting the project.

Myers said Pristine now has seven 30 MW bioenergy developments in the works in the province but is likely to lower that to three or four for the BC Hydro power call. The company plans to use standard boiler technology as it has seen others have problems with newer technologies.

“We’ve got a design we think that works, we think our numbers work and we’ve got good fuel-supply relationships,” Myers said.

“We have to basically ensure that if we have a mill that closes that we can pick up forestry licenses and pick up the fuel that we need from another mill or from waste in the forest or from dead trees,” he said.

Myers said he is “absolutely worried” about possible delays in the award of electricity contracts, something that dogged a recent clean power call in the province.

Outside of bioenergy, Pristine is also waiting to hear if it has won two more wind energy contracts in Ontario, which is pushing forward with plans to build up is green energy sources as the province prepares to phase out coal-fired generators.

The company will also look at some small acquisitions, notably ones that have a small operating asset and development potential.

Pristine’s stock is rated a “buy” or better by four of six analysts, according to Thomson Reuters data. The company is liked because of its diversification across different energy sources and its ability to attract funding.

“Pristine is well positioned to capture growth from its development opportunities and build sustainable cash flows in the future,” said Tania Maciver, an analyst at NCP Northland Capital Partners.

“So far, Pristine has successfully structured project proposals with compelling economics, beating several nameplate developers in the industry for long-term power purchase agreements,” she said in a note to clients this week.

Pristine’s stock was unchanged at C$2.38 on the Toronto Stock Exchange on Tuesday afternoon.

($1=$1.06 Canadian)

Editing by Rob Wilson